Air Products forecast dragged down by weakness in Europe
(Reuters) - Industrial gas supplier Air Products and Chemicals Inc (APD.N) forecast a lower-than-expected profit for the current quarter and trimmed its full-year outlook due to weakness in Asia and Europe.
Growth in Asia, Europe and sales at the company's electronics segment were below expectations during the third quarter, Chief Executive John McGlade said.
Europe, the company's second-biggest market after the United States, has been a drag on its performance in recent quarters.
The company has been looking to reduce its dependence on the continent. In June, it bought a 67 percent stake in Chile-based Indura SA INDUR.UL, expanding in fast-growing Latin America.
Air Products sold its homecare business in Belgium, Germany, France, Portugal and Spain to bigger rival Linde AG (LING.DE) for $750 million earlier this year.
The company said it continued to "actively market" the remaining portion of its homecare business, which is primarily in the United Kingdom, and expects to close a sale by the end of the year.
Allentown, Pennsylvania-based Air Products said it may have to take a charge in the future related to disposing the business.
The company -- which supplies argon, oxygen and other industrial gases to retail, manufacturing and construction customers -- said it continued to reduce costs at its European business and had cut about 600 jobs.
Air Products, whose customers include Apple Inc (AAPL.O) and Intel Corp (INTC.O), said third-quarter operating margin at its electronics and performance materials segment fell 3.1 percentage points due to lower volumes and pricing.
"The current economic uncertainty continues to impact our near-term volume growth," CEO McGlade said.
The company expects an adjusted fourth-quarter profit of between $1.42 and $1.47 per share. Analysts on average were expecting $1.50 per share, according to Thomson Reuters I/B/E/S.
The company now expects a full-year profit of between $5.40 per share and $5.45 per share, down from its earlier forecast of $5.47 per share to $5.60 per share.
Third-quarter profit rose to $484.5 million, or $2.26 per share, from $326.5 million, or $1.50 per share, a year earlier.
Excluding one-time items, it had a profit of $1.41 per share, in line with analysts' estimates.
Revenue fell 5 percent to $2.34 billion. Cost of sales fell 7 percent, while selling and administrative costs dipped 2 percent in the third quarter.
Shares of Air Products, which have lost about 7 percent in 2012 till Monday, closed at $79.58 on the New York Stock Exchange.
(Reporting by Swetha Gopinath in Bangalore; Editing by Sreejiraj Eluvangal)
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